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Steinhoff shares plunge 60% as CEO Markus Jooste quits

Steinhoff shares plunge 60% as CEO Markus Jooste quits

Chief executive officer Marcus Jooste resigned with immediate effect on Wednesday after the global furniture and clothing retailer reported irregularities in its accounts that require further investigation.

Steinhoff said in a statement that it would publish its audited 2017 consolidated financial statements when it is in a position to do so.

Reuters reported last month that Steinhoff International did not tell investors about nearly $1 billion in transactions with a related company despite laws that some experts believe require it to do so.

Steinhoff's biggest shareholder and chairman, the billionaire Christo Wiese, has taken over as executive chairman temporarily. It also raised wider questions about South African corporate governance and would have a negative impact on the country's assets, he added.

Shares were also down by 66 per cent on the German stock exchange.

The group's share price has fallen 18.2% from Friday's closing price of R55.81 to R45.65 on Tuesday after warning shareholders on Monday its results would not be signed by its current auditors. The company has said that move related to whether revenues were booked properly, and whether taxable profit was correctly declared.

Steinhoff, which was already facing a criminal and tax investigation in Germany, said that it approached PwC about conducting an independent investigation into its accounting issues.

It is not clear if these are the accounting irregularities Steinhoff is referring to in its latest statement.

Wiese borrowed €1.6 billion ($1.9 billion) to buy additional Steinhoff shares through a family trust in September 2016, pledging €3.2 billion of his existing holding as security to the investment banks that lent the money. A spokesman declined further comment. There were wider repercussions in the Steinhoff group, with Ben la Grange, chief executive of Steinhoff African Retail (STAR) SRRJ.J , which includes control of Shoprite SHPJ.J , also resigning and STAR shares falling more than 30 percent.

The JSE's director of issuer regulation John Burke told Reuters the bourse was in talks with Steinhoff to get answers on the investigation of possible accounting irregularities.

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